D&B releases second edition of "India's Leading BFSI Companies 2009"

Dun & Bradstreet, the world’s leading provider of global business information, knowledge and insight, today released the second edition of "India's Leading BFSI Companies 2009". The publication which profiles 249 companies includes 69 banks, 35 broking companies, 91 non banking financial services companies, 22 mutual fund and 32 insurance companies. The aggregate total income of all profiled companies amounted to Rs 7,562.5 bn in FY08.

Speaking at the launch, Dr. Manoj Vaish, President & CEO – India, Dun & Bradstreet, said, “The banking, financial services, mutual fund and insurance sectors have been critical constituents of the Indian economy. Even during the recent financial meltdown, driven by a still growing Indian economy, the Indian BFSI sector has demonstrated commendable resilience. With consistent focus on reforms by policy makers, and with the improving economic scenario, the sector promises sustainable growth in the years to come.”

“However, the sector is bound to feel some impact of the economic slowdown. For instance, while the 28 public listed banks in our study saw profits rise by 18.1% in FY09, they have also seen write-offs increase by 61.5%,” he added.

Speaking at the event, Mr. Andrew Horne, Managing Director, Xerox India Limited, said, “In today’s business environment, the pressure to increase profits, improve productivity, reduce costs and retain customers is greater than ever before. Document management is an area where BFSIs can save up to 25% costs and optimize profits. Xerox’s partnership with Dun & Bradstreet is a part of our consistent efforts to educate enterprises about adopting the right processes for managing documents and increasing efficiencies.”

“With our offerings, financial institutes can not only save costs but also accelerate workflows, increase competitiveness and improve customer satisfaction,” he added.

D&B’s ‘India’s Leading BFSI Companies 2009’ was released by Guest Of Honour, Mr. S. S. Tarapore, who also delivered the keynote address on “Macroeconomic Strengths and Policy Pitfalls”. Also present were Mr Sanjay Sethi, Chief Operating Officer, Enterprise Business Services, TATA Teleservices Limited , Mr Atul Varma, Advisor, Forbes Technosys Limited, Mr K S Harshan, Executive Director, The Federal Bank Limited and Mr. Sanjiv Bhasin, CEO - DBS Bank Limited

Leading names from the BFSI sector participated in a panel discussion on “The Global Financial Turmoil and the Challenges for the BFSI Sector”, that followed thereafter

About D&B’s India's Leading BFSI Companies 2009

Dun & Bradstreet’s ‘India’s Leading BFSI Companies 2009’ attempts to highlight the growth and performance of the companies in the BFSI segment.

The publication provides a brief overview of the trends and progress in the sector, apart from profiling the leading players with a total income of over Rs 250 mn in FY08.

Key Highlights:

Banks

• The Total assets of all SCBs (excluding RRBs) stood at Rs 43,264.8 bn. The asset to GDP ratio stood at 91.8% for FY08, vis a vis 83.5% in FY07
• The advances forwarded to sensitive sectors are likely to be a pain-point for SCBs. The total outstanding exposure to sensitive sectors as on March 31, 2008, grew by 25% on a yearly basis to around Rs 5,109.9 bn. 85% of these advances were extended to the real estate sector
• Total distressed assets (Total NPAs along with restructured loans) for SCBs increased on a y-o-y basis by 24% to Rs 751.4 bn during FY08. Private Banks recorded a yearly growth of 60% in their distressed assets. This figure is likely to go higher during FY09, since SCBs have begun reporting delinquencies in their loan portfolios, and the advances in sensitive sector may pinch further
• Despite the slowdown, the Indian financial system was relatively resilient - total income during FY09 (for 28 listed banks) rose by 23.8% with profit rising by 18.1%
• However, Indian banks were certainly affected by the slowdown. Due to the slowdown in economic activity and the resultant contraction in demand, growth moderated in the corporate sector. Also, the credit crunch and high interest rates in the economy made it difficult for companies to service their loan obligations. As a result, the banks’ delinquency rates increased and the total provisions for FY09 in turn rose by 25%
•  Rising levels of NPAs also led banks to write off their loans. During FY09, the write offs of 28 listed banks rose by 61.5%

 NBFCs

• Total financial assistance sanctioned by financial institutions accelerated sharply during FY08, increasing by 86% over the previous year
• The total assets of NBFCs form around 9% of the total assets of the financial sector. Helped by fund based income the total income of NBFCs grew by more than 79.3% to Rs 102.6 bn in FY08
• NBFCs registered an impressive performance during FY08 as compared with the previous year. The total income for the group grew by more than 79.3% to Rs 102.6 bn in FY08. The growth in total income was driven by both fund-based income and fee-based income, which rose sharply by 79.8% and 56.6%, respectively

Insurance

• The overall insurance penetration during CY 2007 in India was 4.7% as against 7.5% for the world. This shows the extent of untapped potential in India
• During FY08, the y-o-y premium growth, in USD terms for the emerging economies was higher than that of global economies. Life and non life insurance premium grew y-o-y approximately 14.2% and 5.6% respectively for Indian insurance companies

Mutual Funds and Broking

• The immediate effect of the global financial crisis was felt in sectors related to capital markets. The stocks market tumbled post September 2008.The liquidity problem left FIIs in dire need of cash resulting in a down trend in equity markets. During FY09, net investment by the FIIs stood at a negative Rs 477.1 bn as against positive net investment of Rs 539.3 bn in FY08

• The household sector increased its exposure to the MF segment during FY06-FY08 due to the attractive returns offered by MF schemes owing to the upsurge in stock markets, and due to its growing income levels. The household sector’s savings in the MF industry increased from Rs 226 bn in FY06 to Rs 568 bn in FY08
• Debt oriented schemes have continued to contribute the most to Assets Under Management (AUM) in the industry. In fact during FY09, when the AUM under the Equity oriented and balanced schemes reported a major decline of around 37% and 34% respectively, the AUM under income oriented schemes fell by just over 5%
• Moreover, with FIIs pulling out of Indian stock and bond markets during FY09, mutual funds were net buyers during FY09. Net investment by FIIs was negative Rs 458 bn while the net investment of domestic MFs stood at Rs 887 bn

About Dun & Bradstreet (D&B):

Dun & Bradstreet (NYSE:DNB), the world’s leading source of global business information, knowledge and insight, has been enabling companies to Decide with Confidence® for 167 years. D&B’s global commercial database contains more than 140 million business records. The database is enhanced by D&B’s proprietary DUNSRight® Quality Process, which transforms the enormous amount of data collected daily into decision-ready insight. Through the D&B Worldwide Network – an unrivaled alliance of D&B and leading business information providers around the world – customers gain access to the world’s largest and highest quality global commercial business information database. 

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